Unassociated Document


    AMENDMENT
      NO. 3

    TO

    BURLINGTON
      RESOURCES INC.

    PHANTOM
      STOCK PLAN FOR NON-EMPLOYEE DIRECTORS

     

    The
      Burlington Resources Inc. Phantom Stock Plan for Non-Employee Directors (the
      “Plan”) is hereby amended as follows:

     

    1.  The
      first
      sentence of Section 1.10 of the Plan is amended, effective as of the “Effective
      Time” as defined in that certain Agreement and Plan of Merger dated as of
      December 12, 2005 by and among Burlington Resources Inc., ConocoPhillips
      and Cello Acquisition Corp. (the “Effective Time”), to read as
      follows:

     

    “1.10
      Phantom
      Stock
      means a
      phantom or notional share of common stock of the Company (except as otherwise
      provided in Section 4.8).”

     

    2.  Section
      1
      of the Plan is amended, effective as of the Effective Time, by adding the
      following new Section 1.13:

     

    “1.13
      S&P
      Account
      means a
      notional account credited with units in a Standard & Poor’s 500 Composite
      Stock Price Index fund or in a mutual fund selected by the Management Committee
      that tracks such index, as provided in Section 4.4.”

     

    3.  Section
      4.1 of the Plan is amended, effective as of the Effective Time, by adding the
      following sentence of the end thereof:

     

    “No
      Phantom Stock shall be granted pursuant to this Section 4.1 after the ‘Effective
      Time’ as defined in that certain Agreement and Plan of Merger dated as of
      December 12, 2005 by and among Burlington Resources Inc., ConocoPhillips and
      Cello Acquisition Corp.”

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    4.  The
      first
      two sentences of Section 4.2 of the Plan are amended, effective as of January
      1,
      2005, to read as follows:

     

    “During
      an election period prescribed by the Compensation Committee prior to each Grant
      Date, a Participant may elect to have all or a portion of the shares of Phantom
      Stock that are to be granted to the Participant on such Grant Date be paid
      in
      one of the forms specified in Section 4.4 following the Participant’s
      Termination. Subject to Section 4.7, the payment election shall be irrevocable,
      shall apply only to the grant applicable to that specific Grant Date and shall
      be made on a form prescribed by the Compensation Committee.”

     

    5.  Section
      4.4 of the Plan is amended, effective as of the Effective Time, to read as
      follows:

     

    “4.4
      Payment
      of Accounts.
      Upon a
      Participant’s Termination, the Company shall pay to such Participant (or to his
      or her Beneficiary in case of the Participant’s death) in cash the balance
      credited to his or her Account(s) as follows:

     

    
      	 	
              (a)

            	
              a
                lump sum payment; or

            


    

    
      	 	
              (b)

            	
              in
                60 consecutive substantially equal monthly installments;
                or

            


    

     

    
      	 	
              (c)

            	
              in
                120 consecutive substantially equal monthly
                installments;

            


    

     

    whichever
      form of payment has been elected (or deemed elected) by the Participant. If
      distributions are to be made in substantially equal installments, the amount
      of
      each installment payment shall be determined by dividing (i) the amount credited
      to the portion of the Participant’s Account to be paid in that form determined
      as of the valuation date before the applicable installment payment by (ii)
      the
      number of installment payments (including the applicable installment) remaining
      to be paid. On and after the Participant’s Termination and until the full
      distribution of his or Account(s), the Participant may invest all or a specified
      percentage of his or her Account(s) as of any date in the Interest Account,
      Company Stock Account and/or S&P Account in such proportions as elected by
      the Participant. Each Interest Account shall accrue interest on the balance
      credited to such Interest Account from the date of Termination through the
      date
      of its distribution. Such interest shall be credited to the Interest Account
      as
      of such valuation dates as shall be established by the Compensation Committee.
      The Compensation Committee shall determine, in its sole discretion, the rate
      of
      interest to be credited periodically to the Interest Accounts; provided,
      however, that in no event may the interest rate be less than the Moody’s
      Long-Term Corporate Bond Yield Average 

     


    
      
         

      

      
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    (as
      it
      may be adjusted from time to time); and provided, further, that the Plan may
      not
      be amended to reduce or eliminate this minimum rate of interest. Each S&P
      Account shall be credited with whole and fractional units in a Standard &
Poor’s 500 Composite Stock Price Index fund (or by reference to a mutual fund
      selected by the Compensation Committee that tracks such index as of the
      applicable date) and with any notional distributions on such units, which shall
      be credited as being reinvested in additional units. The Compensation Committee
      shall determine, in its sole discretion, the valuation date for valuing each
      Participant’s Account.

     

    Payment
      of Accounts shall commence or be made in the January following the year in
      which
      the Participant’s Termination occurs. In the case of distribution to a
      Participant in installments, payment will be made on a pro rata basis from
      each
      of the Participant’s Accounts.”

     

    6.  Section
      4.5 of the Plan is amended, effective as of January 1, 2005, by adding the
      following sentence at the beginning of said Section:

     

    “This
      Section 4.5 shall not apply to the portion of a Participant’s account
      attributable to grants of Phantom Stock after December 31, 2004.”

     

    7.  Section
      4
      of the Plan is amended, effective as of January 1, 2005, by adding the following
      new Sections 4.6 and 4.7:

     

    “4.6
      Acceleration
      of Payments for Post-2004 Phantom Stock Grants.
      Anything in this Plan to the contrary notwithstanding, with respect to the
      portion of a Participant’s Account attributable to grants of Phantom Stock after
      December 31, 2004, this Section 4.6 shall apply in lieu of Section
      4.5.

     

    Notwithstanding
      anything in the Plan to the contrary, the Compensation Committee, in its sole
      discretion, may accelerate the payment of all or part of the unpaid balance
      of a
      Participant’s Account(s) at the request of the Participant upon its
      determination that the Participant has incurred an unforeseeable emergency.
      For
      this purpose, the term “unforeseeable emergency” means a severe financial
      hardship to the Participant resulting from an illness or accident of the
      Participant, the Participant’s spouse, or a dependent (as defined in Section
      152(a) of the Internal Revenue Code of 1986, as amended) of the Participant,
      loss of the Participant’s property due to casualty, or other similar
      extraordinary and unforeseeable circumstances arising as a result of events
      beyond the control of the Participant. A distribution may be made on account
      of
      an unforeseeable emergency only if the amounts distributed with respect to
      an
      emergency do not exceed the amounts necessary to satisfy such emergency plus
      amounts necessary to pay taxes reasonably anticipated as a result of the
      distribution, after taking into account the extent to 

     


    
      
         

      

      
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    which
      such hardship is or may be relieved through reimbursement or compensation by
      insurance or otherwise or by liquidation of the Participant’s assets (to the
      extent the liquidation of such assets would not itself cause severe financial
      hardship).

     

    “4.7
      Election
      of Form of Payment under Transition Rules.
      With
      respect to the portion of a Participant’s Account attributable to grants of
      Phantom Stock after December 31, 2004, the Compensation Committee may allow
      Participants to make an election or to change their election as to the form
      of
      payment pursuant to Section 4.4 during an election period prescribed by the
      Compensation Committee to the extent permitted under transition rules prescribed
      by the U.S. Treasury Department under Section 409A of the Code.”

     

    8.  Section
      4
      of the Plan is amended, effective as of the Effective Time, by adding the
      following new Section 4.8:

     

    “4.8
      Conversion
      of Company Stock Account.
      At the
“Effective Time” as defined in that certain Agreement and Plan of Merger dated
      as of December 12, 2005 by and among the Company, ConocoPhillips and Cello
      Acquisition Corp., the Phantom Stock held in the Company Stock Account shall
      be
      converted in accordance with said Agreement and Plan of Merger into phantom
      shares of common stock of ConocoPhillips, and thereafter the term “Phantom
      Stock” for purposes of this Plan shall mean a phantom or notional share of
      common stock of ConocoPhillips.”

     

    9.  Section
      5.4 of the Plan is amended, effective as of January 1, 2005, to read as
      follows:

     

    “5.4
      Termination
      and Amendment.
      Subject
      to Section 5.7 and the limitation on amendments to the minimum interest rate
      set
      forth in Section 4.4, the Board may from time to time amend, suspend or
      terminate the Plan, in whole or in part, and if the Plan is suspended or
      terminated, the Board may reinstate any or all of its provisions. Subject to
      Section 5.7 and the limitation on amendments to the minimum interest rate set
      forth in Section 4.4, the Management Committee may also amend the Plan;
      provided, however, that it may not suspend or terminate the Plan, or
      substantially increase the obligations of the Company under the Plan, or expand
      the classification of employees who are eligible to participate in the Plan.
      No
      amendment, suspension or termination of the Plan may impair the right of a
      Participant or his or her Beneficiary to receive the benefit accrued hereunder
      prior to the effective date of such amendment, suspension or
      termination.”

     


    
      
         

      

      
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    10.  Section
      5
      of the Plan is amended, effective as of January 1, 2005, by adding the following
      new Section 5.7:

     

    “5.7
      Compliance
      with Code Section 409A.
      With
      respect to the portion of a Participant’s Account(s) attributable to any grants
      of Phantom Stock after December 31, 2004, it is intended that this Plan comply
      with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)
      and any regulations, guidance and transitional rules issued thereunder, and
      the
      Plan shall be interpreted and operated consistently with that intent. If the
      Compensation Committee shall determine, following the issuance of final
      regulations, that any provisions of this Plan as applicable to the portion
      of
      this Plan attributable to deferrals after December 31, 2004, do not comply
      with
      the requirements of Section 409A of the Code, the Compensation Committee shall
      amend the Plan to the extent (and only to the extent) necessary (including
      retroactively) in order to preserve compliance with said Section 409A; provided,
      however, that any such amendment affecting amounts previously deferred under
      the
      Plan shall be made in a manner that preserves the economic value of such
      deferred amounts to the Participant.

     

    It
      is
      intended that the portion of a Participant’s Account(s) attributable to any
      grants of Phantom Stock prior to January 1, 2005 qualify under the grandfather
      provisions of Section 409A of the Code and the regulations and guidance
      thereunder so that such deferrals (as adjusted for earnings and losses thereon)
      are not subject to said Section 409A. No amendments shall be made to this Plan
      that would cause the loss of such grandfather protection.”

     


    
      
         

      

      
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